Analysts at UBS Investment Research on Friday downgraded its rating for The Mosaic Co. from buy to neutral, citing the rising stock price and more modest expectations for a rebound in potash demand.
New York-based UBS also cut its price target for Plymouth-based Mosaic (NYSE: MOS) to $53 per share, down from $55. The fertilizer producer’s stock closed at $51.38 on Thursday.
Analysts Don Carson and David Silver now project earnings of $3 per share for full-year fiscal 2010, down from its previous estimate of $3.15. They also reduced their full-year 2011 earnings forecast to $4.30 per share from $4.45.
In a research report, the analysts said potash supply “remains plentiful at the producer level, but we detect few signs of upward movement in potash prices in any major markets.”
They expect prices to remain stable for the next several quarters, while volume starts to recovery. “A return to meaningful producer pricing power appears at least one to two years away.”
UBS also downgraded one of Mosaic’s leading competitors, Saskatoon, Saskatchewan-based Potash Corp. of Saskatchewan Inc. (NYSE: POT), from buy to neutral.
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